04 DECEMBER 2002

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Political indecision over EU postponing investment - businessmen

By Kurt Sansone

The political uncertainty over EU membership is taking its toll on a number of businesses as investment decisions are being postponed until after the final judgement is made.

Not all businesses have been affected in the same manner but the general sentiment in the business community is one yearning for the uncertainty to come to an end as soon as possible.

The Malta Financial and Business Times caught up with four of Malta’s top businesspersons and asked them for their views on the political uncertainty over EU membership and how this is affecting their investment choices.

The businesspersons interviewed are Eden Leisure Group Managing Director Ian De Cesare, Gasan Group of Companies Chairman Joe A. Gasan, Farsons Group Chief Executive Louis Farrugia and Marsovin Chairman Tony Cassar.

There was a similar resonance in all replies, with Joe Gasan and Louis Farrugia stating outright that the indecision over EU membership is contributing to the postponement of investment.

Gasan Chairman Joe Gasan said that until it is clear whether Malta is going to be a member of the European Union or not "investment decisions have to be kept on hold wherever possible."

He insisted that "the sooner all entrepreneurs know exactly what the future of Malta’s relations with the European Union are going to be the sooner one can take the necessary investment decisions one way or another."

Farsons Group Chief Executive Louis Farrugia commented on the enormity of the decision at hand and described it as being of fundamental importance to entrepreneurs.

Mr Farrugia argued that entrepreneurs must know what the final trading rules are for them to be able to take investment decisions "worth millions of liri."

He insisted: "Clearly, most business decisions of major significance are being postponed until we finally know in which direction we are heading."

Mr Farrugia, who has openly declared his position in favour of EU membership said that by trading under the EU’s rules and standards the country would have a stronger economy. This would lead to "more prosperity for all our citizens," he insisted.

Meanwhile, for Eden Leisure Managing Director Ian De Cesare the question of instability has no significant impact on the group’s decision to invest on the InterContinental, IMAX and Ice Arena projects as this was taken some years back.

According to Mr De Cesare the question of instability has no direct link to consumer spending at their respective leisure outlets.

However, Mr De Cesare did tell this newspaper that on a personal level he believes that the sooner the final decision is taken, the better it is for everyone.

Marsovin Chairman Tony Cassar had a less apprehensive outlook of things. He told this newspaper that the "impact of indecision can only be negative in the short term as it vibrates at consumer level and leaves a negative feeling amongst the population."

Mr Cassar said that Marsovin, being a consumer-led company, is very sensitive to consumer moods and spending. "This pro- or anti-EU affects us mostly at that level, as internally our investments have to go on at a pace dictated to us by international business," Mr Cassar explained.

He argued that with both political parties broadly agreeing on market liberalisation, it is only the timing that is yet unknown.

For Mr Cassar and his company the future is clear: "We have to compete on a level playing field not only against other Maltese companies but also with international producers."

He added: "The instability over Malta's future relations with the EU have very little bearing on our investment decisions. It is the market that dictates to us not our politicians."

The Marsovin chairman acknowledged that the company does analyse political decisions, which influence the economic future of the country, and subsequently draws its own conclusions. He added: "At the moment we do not see any major problems that affect our long term decisions on investment."



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Editor: Saviour Balzan
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